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DA takes look at Water Authority – the first of more scrutiny to come

The reverberations from a scathing state report about repeated leadership failures at the Erie County Water Authority came quickly Wednesday and are likely to be felt for a long time as local officials ponder a shake-up at the agency.

On Wednesday, Erie County District Attorney John J. Flynn asked his Special Investigations and Prosecutions Bureau to investigate whether any crimes were committed at the Erie County Water Authority, based on the findings in a state Authorities Budget Office report released Tuesday.

On Thursday, the Water Authority board is expected to meet in closed session to consider the current employment contract for Water Authority Executive Director Earl Jann. He served as board chairman until May 2017, when he left the board to become the authority's executive director. His three-year employment contract includes a golden parachute if he were to be fired.

Meanwhile, county legislators are expected to further discuss the possibility of converting the Water Authority into a county department.

Both Jann and former Water Authority Secretary Joseph Burns were among those criticized in the state report outlining numerous failings of authority leadership.

Jann was one of the commissioners accused of repeatedly breaking laws and best practices regarding openness, transparency and independent oversight and governance of the agency during 2016 and 2017. The Authorities Budget Office also cited the board actions that led to Jann receiving the employment contract with its golden parachute that could make him too expensive to fire.

Jann and Burns held key decision-making roles as inner-circle members when a Republican-majority board ran the agency. Recent actions by the agency's new Democratic leadership suggest their job security may be at stake.

The new board is expected to meet in closed session after its regular meeting today – the second such time – to scrutinize the terms of Jann's contract, which would include the golden parachute language that protects him. At the board's last meeting, they also looked at the employment contract for Deputy Director Robert Lichtenthal, who has played a more high-profile role in meetings since the new Democratic majority took over.

Burns, the authority's former secretary and general counsel, was not named in the state report, but references were made to repeated improper handling of Freedom of Information Law requests while Burns served as secretary and FOIL officer. Authority Chairman Jerome Schad said Tuesday he intends to hire a new general counsel who will be tasked with investigating the prior handling of FOIL requests.

The district attorney, meanwhile, had the chief of his Special Investigations and Prosecutions Bureau reach out to the director and deputy director of the Authorities Budget Office to see whether any potential crimes may have been committed by Water Authority leadership. Both administrators said they found no evidence of criminal wrongdoing.

The agency cited repeated violations of the Open Meetings Law and Freedom of Information Law in its report, but those carry civil penalties, not criminal ones.

Finally, the county Legislature has been asked to deal with several Water Authority matters, which will begin unfolding over the next few weeks.

The state report recommends that the Legislature fire all commissioners who served on the board in 2016 and 2017. Schad is the only remaining member of the board who served during that time. Minority Leader Joseph Lorigo, C-West Seneca, and Legislator Thomas Loughran, D-Amherst, have called for Schad's resignation.

While the state agency asked the Legislature to remove Schad, some legislators contend they don't have the legal power to do that. That discussion is expected to play out in coming weeks.

Meanwhile, Loughran and Legislator Patrick Burke, D-Buffalo, want the Water Authority to be become a county department instead of an independent state-supervised authority. Burke has asked the Comptroller's Office on the ability for the county to absorb the authority's liabilities and debts in order for that to happen.

"The Legislature has something it can do, and I'm going to try and get it done," Burke said.

Legislator John Bruso, D-Lancaster, who chairs the Energy and Environment Committee, will hold a discussion about this issue at the committee's June 28 meeting. Water Authority commissioners and key administrators are expected to attend, as well as other county administrators.

"Let's actually do it the right way," Bruso said. "Let's talk about what we can do, and what we can't do. All of this needs to be as transparent as possible."

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